The post Crypto News: Fed Shuts Down Special Crypto Oversight, Returns to Normal Rules appeared first on Coinpedia Fintech News
The U.S. Federal Reserve has announced it will shut down its Novel Activities Supervision Program, a framework created in 2023 to monitor banks involved in crypto, blockchain, and fintech partnerships.
The program was launched to give the Fed a closer look at new and complex banking activities, including cryptocurrency custody, stablecoin projects, tokenized assets, and partnerships between banks and technology companies. It also tracked banks that provided large amounts of traditional banking services to crypto firms and fintech startups.
According to the Fed, the program has now served its purpose. Regulators say they have gained a better understanding of the risks, controls, and management practices involved in these activities. As a result, crypto- and fintech-related banking operations will now return to the Fed’s standard supervisory process.
“Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities, related risks, and bank risk management practices,” the official announcement read.
The decision could ease regulatory pressure on banks working with digital assets and innovative financial technology. Analysts believe this could encourage more partnerships and development in areas such as blockchain-based payments and tokenization.
However, there is also a warning that general oversight may not move as quickly as the fast-changing world of decentralized finance (DeFi), meaning risk monitoring will remain a challenge.
For now, social media reaction has been quiet, with little noticeable change in sentiment toward Bitcoin or the wider crypto market. But if banks feel more confident under normal supervision, the move could eventually bring more institutional money and innovation into the digital asset space.